Ace investor Vijay Kedia wants LTCG tax on equities scrapped

Ace investor Vijay Kedia wants LTCG tax on equities scrapped

Veteran investor Vijay Kedia has urged Finance Minister Nirmala Sitharaman to abolish the long-term capital gains (LTCG) tax on listed equities.

He said the levy is a hurdle in creating long-term wealth and patient capital.

In his post on X, Kedia presented his appeal as the first of three suggestions to strengthen India's capital markets.

Long-term investors contribute to economic growth: Kedia

Kedia emphasized that long-term shareholders are not speculators but providers of patient risk capital.

He said by holding businesses for long periods, investors allow companies to grow, create jobs, innovate and contribute to overall economic growth.

He also argued that LTCG tax is unfair as it taxes value creation twice since the government collects various taxes during a company's growth journey.

Differentiate between investing and speculation in tax policy: Kedia

Kedia also advocated for a clear regulatory and tax line between investing and speculation.

He said, "Tax policy should clearly distinguish between investment and speculation."

He called for explicitly rewarding long-term ownership of productive businesses while differentiating it from short-term trading activity.

This is especially important as LTCG tax on listed equities was reintroduced in the Union Budget 2018 after a 14-year gap.

Currently, long-term capital gains are taxed at 12.5% on gains exceeding ₹1.25 lakh per financial year.